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Pa.: Cosmetology Student Not Entitled to Wages as ‘Employee’

Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.

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A cosmetology school graduate who performed work at the school’s clinic while enrolled as a student was not entitled to minimum wage as an “employee” under either the Fair Labor Standards Act (FLSA) or the Pennsylvania Wage Payment and Collection Law, a federal district court held.

Bogumila Jochim enrolled at Jean Madeline Education Center of Cosmetology, Inc., in 2012, signing an enrollment contract providing that she would pay Jean Madeline for educational services. A basic cosmetology course at Jean Madeline costs $18,680 and provides students with the 1,250 hours of instruction required by Pennsylvania law. Jochim graduated in 2013 after completing the required 1,250 hours of instruction, passed the board exam, and is now a licensed cosmetologist.

Jochim filed suit against Jean Madeline, claiming that she was not paid for work performed at its clinic in violation of federal and state labor laws. Her complaint states that she had received the impression, based on certain descriptions of Jean Madeline's clinic as offering a "true salon environment," that she "would be paid for services rendered in the salon, in the clinic, as [the School] called it." Although no one from Jean Madeline ever told her that she would be paid for her work in the clinic, Jochim "felt it was implied."

Jean Madeline neither paid Jochim for providing services to clients in the clinic nor told her that she would be compensated for working in the clinic. Jochim knew that she was not a Jean Madeline employee, but thought she would receive more education before being asked to practice treatments on live clients at the clinic, according to the complaint.

Further, Jochim said that she and other students were upset because the school "was making so much money" and they felt they "were being used for free labor." However, Jochim never used the school's complaint procedure to discuss compensation.

The court, examining the economic reality of the relationship between Jochim and the cosmetology school, found that the “economic reality of the relationship was that Jochim paid the school tuition in exchange for an education in cosmetology, and a significant part of her education involved working in Jean Madeline’s clinic as a student.”

In its analysis of the relationship, the court found that students received instruction on how to improve; they were sent away only if they refused to perform a treatment, but not if they performed treatments poorly, as an employee would be. In addition, instructors made assignments based on the number of clients in the waiting area and which students were available at the time, without regard to a student’s particular skill level or proficiency.

The court also noted that Jean Madeline provided the physical facilities and the products necessary to practice treatments on clients. Tuition fees covered equipment; students were not able to opt out of this fee and buy their own equipment.

The only special skill required of Jochim was completion of the hours of classroom training required by state law, according to the court, and there was no guarantee of employment upon graduation.

The court concluded that, whether or not the clinic is profitable, the economic reality of the relationship was that Jochim paid the school tuition in exchange for an education in cosmetology. “Jochim was not an employee of Jean Madeline under the FLSA,” the court said. “Rather, Jochim was a student who participated in a realistic clinic mimicking an actual salon as part of her education.”

Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.